KLM Royal Dutch Airlines
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- KLM Royal Dutch Airlines
P.O. Box 7700
1117 ZL Schiphol
- Main hub
- Amsterdam Airport Schiphol
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Based in Amsterdam, KLM is the national airline of the Netherlands. Part of the Air France-KLM Group, KLM operates an extensive network which includes services within Europe and to Asia, Africa, North America, Central and South America and the Middle East. KLM is a founding member of the SkyTeam alliance.
Location of KLM Royal Dutch Airlines main hub (Amsterdam Airport Schiphol)
1,907 total articles
189 total articles
Garuda Indonesia formally enters SkyTeam on 5-Mar-2014, becoming the fifth flag carrier in the fast-growing Southeast Asian region to join a global alliance. With Garuda, SkyTeam surpasses Star as the largest alliance in Southeast Asia by seat capacity with about a 16% share compared to 14% for Star and 10% for oneworld.
For Garuda, entering SkyTeam is an important component of the carrier’s new business plan, which also includes fleet renewal and expansion, product enhancements and ambitious growth of its international network. SkyTeam will particularly help Garuda in Europe, a market the carrier is focusing on in 2014 with new non-stop services to Amsterdam and London.
For SkyTeam, Garuda significantly improves the alliance’s access to Southeast Asia, in particular the region’s largest market – Indonesia. SkyTeam now has members in two key fast-growing emerging ASEAN markets – Indonesia and Vietnam.
Air France-KLM’s 2013 results saw its operating result return to profit for only the second time in six years, but the operating margin of just 0.5% (and another net loss) highlights that its Transform restructuring programme still has work to do. A return to profit in the passenger business was instrumental in the improved group result, while the cargo segment remained in loss and the maintenance division continued to produce healthy results.
2014 will see a modest increase in ASKs of around 1% overall, down 2% on medium-haul and up 2% on long-haul. The strongest area of growth will be Latin America and the group’s position in that market should be enhanced by a newly announced partnership with GOL (including the acquisition by Air France-KLM for USD52 million of a 1.5% equity stake in the Brazilian carrier) that broadly mirrors SkyTeam partner Delta’s relationship with GOL.
The North Atlantic JV within SkyTeam delivers significant unit revenue benefits, but the deal with GOL expands Air France-KLM's options. This, and its indication that it is seeking to deepen its relationship with Etihad, are further signs that SkyTeam cannot satisfy all its needs.
Canada’s WestJet managed to grow FY2013 earnings by nearly 11% – in the same year it launched a new regional carrier, reconfigured its aircraft to offer an extended legroom section and introduced new fare bundles. The results are commendable given the debut of Encore in particular pressured WestJet’s unit revenue and yields during the latter half of 2013.
WestJet maintains a relatively positive view in the early days of 2014, supported by a recent 2% fare hike across its network that for the moment is being matched by its competitors and absorbed by the market. But the carrier is warning of cost headwinds during 2014 driven by a weakening of Canada’s currency against the US dollar and the acceleration of certain engine overhauls.
With a fairly decent balance sheet, WestJet should be able to withstand some of the potential economic challenges created by currency fluctuations that are driven by uncertainty in the emerging markets. But if conditions worsen, it may need to temper some of its growth plans in order to protect its consistent profitability.
Rome Fiumicino, the larger of the two airports serving the Italian capital, is emerging as a key battleground for European LCCs, in addition to being the last stronghold of struggling Alitalia. Ryanair and Vueling will increase their competition in the Italian domestic market, while easyJet and Vueling will encounter each other more in international markets from Rome. All three will pose a growing threat to Alitalia.
On 24-Jan-2014, easyJet announced the launch of five further international routes from Fiumicino this summer, after launching routes to Prague and Nantes in Dec-2013. Its expansion plans will see its capacity in Rome Fiumicino grow by one third in 2014. This follows the establishment at Fiumicino of a Ryanair base in late 2013 and expansion plans announced by Vueling at the airport.
Is there room for all the LCCs? – Norwegian Air Shuttle, Monarch, Wizz Air, Pegasus, NIKI and Germanwings are also present at Fiumicino. Will Alitalia be able to withstand the ever growing competitive pressure? Recalling Roman gladiatorial combat of ancient times, this could be a fight to the death.
In the summer of 2014, Transavia France is to add new destinations to its network from Paris Orly and also from other (regional) French airports. In addition, Transavia France will open a base at Strasbourg in Apr-2014. According to data gathered by CAPA, a total of 19 new routes from France, of which 10 are from Orly, will be launched this summer. Six of the Orly routes will utilise A320s leased from Air France.
However, this development does not represent a transfer of routes from Air France to Transavia (as, for example, Lufthansa is doing with its LCC Germanwings). This returns the spotlight on Air France-KLM’s plans for Transavia and on the contrasting ways in which Europe’s Big Three legacy groups are using their LCC subsidiaries in the short/medium-haul markets. With pan-European LCC Vueling and hub feeder Iberia Express in its stable, IAG would seem to have the most comprehensive approach of the three.
The US government has formally stepped in and arguably set a dangerous precedent concerning the new business models being adopted by some of the Gulf airlines in rejecting a request by Air Serbia (formerly JAT) and Etihad to codeshare on service to the US.
The troika of airline lobbying group Airlines For America (A4A), Delta Air Lines and the Air Line Pilots Association formally opposed the request on what is now familiar grounds – arguing the Belgrade-Abu Dhabi–US routings are unviable for the consumer, Air Serbia’s new ownership (Etihad formally took a 49% stake in Jan-2014) is suspect, and the absence of a bilateral agreement with Serbia.
While debate will continue on the merits of the arguments offered by both sides, perhaps another underlying element is Etihad’s and Air Serbia’s plans to bolster the hub at Belgrade. The build-up in Belgrade adds a new competitive dynamic in Europe, one unsavoury to established network carriers within Europe and US airlines serving the continent.
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